Contingent Vs Pending in Real Estate: What’s The Difference?

When you’re browsing real estate listings, you might see terms like contingent or pending next to a property.

At first, they may look similar. But in reality, they mean very different things. Understanding these terms is important. They tell you how far along a sale is and if there’s still a chance to make an offer.

In this article, we’ll break down the real meaning of contingent vs. pending in real estate. We’ll talk about what each state means, how it affects buyers and sellers, and what you need to know if you want to get into the real estate market.

You can make more efficient and superior choices if you know the difference.

Contingent Means Conditions Still Apply

Contingent means that the seller has taken an offer on a property, but the sale is not yet official. There are certain conditions, called contingencies, that must be met before the deal can move forward. These conditions help protect both the buyer and the seller. If any of them are not satisfied, the buyer may be able to back out without penalty.

During this time, homes may have different statuses.

Continue to Show means the seller is still showing the property and may accept backup offers. No Show means the seller has paused showings because they’re confident the deal will close. Some sales include a kick-out clause, which sets a deadline for the buyer to meet their conditions—if they don’t, the seller can move on.

A short sale happens when the property is sold for less than what’s owed on the mortgage and often needs lender approval. Contingent probate refers to homes being sold as part of an estate, usually after the owner has passed away.

In all of these cases, the sale is not final until the listed conditions are fully met.

Key Contingencies Every Homebuyer Should Know Before Signing the Dea

Here are some of the most common contingent types explained:

Financing Contingency

This condition also known as mortgage contingency gives the buyer time to get approved for a mortgage. Even with pre-approval, final loan approval depends on the lender reviewing the buyer’s income, credit, and the property itself. If the buyer is not able to secure financing by a set date, the deal can fall through. This protects the buyer from being locked into a deal they can’t afford.

Home Inspection Contingency

The buyer has the right to have the property inspected by a professional. This inspection checks for issues with the structure, roof, plumbing, electrical, and more. If major problems are found, the buyer can ask for repairs, request a lower price, or walk away from the deal. This helps the buyer avoid surprise costs after the sale.

Appraisal Contingency

Lenders require an appraisal to confirm that the home’s value matches the agreed purchase price. If the home is valued lower than expected, the lender may not finance the full amount. In this case, the buyer can choose to renegotiate the price, pay the difference, or cancel the contract. This protects both the buyer and the lender from overpaying.

Sale of Current Home Contingency

Some buyers have to sell the home they already own before they can buy the new one. In this case, they have a certain amount of time to do that. They can back out of the deal without losing their deposit if they can’t sell. This helps buyers who can’t pay two debts at the same time.

Title Contingency

A title contingency makes sure that the property’s title is free of any legal problems, like debts or disagreements over who owns the property. In Ontario, it’s important to make sure that the person selling the house has the legal right to do so. This condition lets the customer fix any issues that come up during the title search, or they can back out of the deal without any penalties.

Contact a Real Estate Lawyer in Toronto

Insight Law Professional Corporation is a real estate law firm located in Toronto. If you need legal assistance with your real estate transaction, contact us today to learn how we can help.

Strategies for Making an Offer on a Contingent Home

If you’re interested in a contingent property, consider the following steps:

• Talk to your agent first: They’ll check the current status of the property and let you know if making an offer is even possible. They can also guide you on the right approach based on the seller’s situation.
• Make your offer stand out: If you’re serious, consider offering a strong price or reducing conditions. A clean, solid offer is more likely to get the seller’s attention.
• Ask about backup offers: Some sellers may be open to keeping your offer as a backup in case the first one falls through. It doesn’t guarantee anything, but it gives you a chance if the deal doesn’t close.

Pending Means All Conditions Met

A pending sale means all conditions in the agreement have been met or waived, and the deal is now moving toward closing. At this point, the sale is almost complete. The property is usually taken off the market, and no new offers are accepted.

Most of the legal and financial steps are done, and only final paperwork and transfer of ownership remain.

Even though pending deals are close to being final, there are still different statuses that may show up.

A backup status means the seller is still open to taking backup offers, just in case the current deal falls through. This is rare but possible. A no show status means the seller has stopped all showings, and the home will no longer appear on most public listing sites. It usually means the sale is very close to closing.

If a property stays pending for more than four months on the MLS, a tag may appear automatically. This could mean the deal is taking longer than expected or the listing hasn’t been updated.

Lastly, a pending short sale means the lender has accepted an offer on a home being sold for less than what’s owed. This often involves more paperwork and can take extra time to close.

In all pending cases, the sale is expected to go through, but it’s not fully complete until the property officially changes hands.

Can You Make an Offer on a Pending Home?

While it’s less common, making an offer on a pending home is not impossible:

• Backup Offers: Some sellers may still accept backup offers as a precautionary measure.
• Communication: Engage with the seller’s agent to express your interest and inquire about the possibility of submitting a backup offer.
• Be Prepared: Ensure that your financing is in order and that you’re ready to move quickly if the opportunity arises.

Key Differences Between Contingent And Pending Sales In The Ontario Real Estate Market

Both sellers and purchasers in Ontario’s real estate market should be familiar with the terms “pending” and “contingent” sales.

These terms can have a big effect on how a deal moves forward and what happens at the end.

Lastly, Get Professional Help With Your Real Estate Process!

When purchasing or selling a house, understanding the contrast between pending vs. contingent conditions will greatly assist you in making more informed decisions.

Both terms mean that a sale is happening, but they mean different things about how certain the deal is and what needs to be done to finish it.

It’s always a good idea to talk to a lawyer about real estate deals because they can be complicated.

If you live in Toronto, you can get the help and answers you need by calling a real estate lawyer like those at Insight Law Firm. We can help you read contracts, understand your rights, and find a smooth way through the process.

Talking to a lawyer early on can help you save time and stress later on. So, don’t be afraid to get professional help to safeguard your interests in any property deal.

The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.